HARTFORD – In a special session of the House today, State Representatives Jason Perillo (R-113) and Ben McGorty (R-122) voted in support of a bipartisan budget compromise arrived at after a months-long budget impasse that lasted well beyond the close of the regular legislative session at the beginning June, and 118 days after the start of the current fiscal year. The action today ends the longest budget impasse in Connecticut history.
The Shelton legislators noted that this budget, arrived at after marathon negotiations between Republican and Democrat leaders, passed the House by a vote of 126-23. The budget had passed the Senate the previous evening by a vote of 33-3. The margin of favorable votes in both chambers would be enough to override a veto from Governor Malloy if necessary.
“This budget is far from perfect, but it represents important concessions from both sides of the aisle,” said Rep. Perillo, “We had important victories, and those include restoring the education aid to Shelton that the governor threatened to eliminate. We also finally instituted a spending cap and a bond cap to reign in state spending, and phasied in exemptions on taxes on Social Security and pensions. We also protected important programs like Care4Kids. The alternatives being offered by the governor were not acceptable, and I am pleased we were able to arrive at a consensus that helps lay the framework for better budgeting moving forward.”
“I am pleased that we could finally arrive at a budget agreement and I am especially pleased that we will be phasing out the tax on Social Security and pensions, something I have been fighting for since I arrived here,” said Rep. McGorty. “This budget represents giving a little on all sides, but the important priorities we have concerning the preservation of Shelton’s state aid, and making important structural changes to our budgeting process were included. I hope the governor will sign it, but if he does not, we have the numbers to see it pass without him.”
Both legislators said one the paramount priorities they had was restoring the significant cuts to the Education Cost Share (ECS) that Governor Malloy was threatening to cut which represents roughly $6 million for Shelton.
Perillo and McGorty noted that Republican efforts in recent budget negotiations have produced significant structural reforms that will help Connecticut tremendously, with special attention paid to our cities and towns. These reforms represent victories on issues we’ve fought for over the years.
- Phase-in exemptions of taxes on Social Security, pensions and estates. This caps a multi-year push from Republicans who pursued these proposals as a way to encourage people to stay in expensive Connecticut rather than fleeing to lower cost states;
- The legislature will now be required to vote on union contracts, a major win that caps our efforts over the last couple of years;
- EITC: Reduction to 23 percent from federal level of 30 percent;
- Democrats agreed to keep spending on core social services programs at GOP levels. We’re protecting programs such as Care4Kids and others for neediest populations;
- No widespread DMV fee and permit hikes. Democrats wanted $70 million over two years;
- Freeze on hiring state employees: We’ll actually implement one!
Controlling State Spending
- Finally implements an effective cap on state spending;
- A stronger bond cap of $1.9 billion
- This budget includes a Revenue Cap, which will prevent lawmakers from considering 100 percent of state revenue as they build the budget. Essentially, it’s another spending cap that creates an automatic reserve of money. This measure will give the state two spending controls.
- Volatility cap: Excess revenue goes into the Budget Reserve Fund. Money in that fund goes toward unfunded past service liability for SERS and teacher retirement fund.
Important reforms in the package that help municipalities include:
- A town’s ability to pay in arbitration:An arbiter shall not consider 15 percent of a town’s fund balance in a town’s ability to pay an award;
- Minimum budget requirement:in the biennium, towns will not be punished if they reduce their budgets beyond previous year’s spending levels so long as the reductions are no more than the reductions in state aid; the MBR expires every two years.
- Prevailing wage threshold for new construction:We’ve increased it to $1 million from $400,000—a major victory over Democrats and labor unions who have historically launched vigorous fights against our attempts at change. Now includes DECD projects;
- Another binding arbitration win: In proceedings between municipalities and school board employees, an arbiter will not be limited to choosing [current law] either the last best offer from each party. Example: Town offers a zero percent increase, school board offers 5 percent increase, the change in this budget would allow the arbiter to choose an award in the middle;
- Transparency:Any new hires or contract changes installed by a school board during a budget year must be submitted to that town’s finance board for review/comment. This will help create a public dialogue that in most communities does not exist now, providing finance board and members of the public with timely insight to financial decisions made by school board members.